Nepr As Role By Rifai

NEPRA’s ROLE IN RESTRUCTURING OF PAKISTAN’S POWER SECTOR

Energy and Development 20% of World population consume 60% Energy Richest 1 bn people use 5 t.o.e of energy per capita Poorest 2bn people use 0.2 t.o.e per capita Asia has 66% world poor population South Asia has 20% world population, 4% of installed energy capacity.

ESTABLISHMENT OF NEPRA In order to reform the Pakistan power sector a strategic plan for restructuring, reforming and privatization of WAPDA was developed by Government of Pakistan in 1992.The strategic plan was approved by the Council of Common Interests (CCI) in 1993. The strategic plan recommended corporatisation and privatization of WAPDA into separate Generation and Distribution Companies. The Prime Minister directed the implementation of the strategic plan for WAPDA as approved by the CCI through P.M’s directive dated 24-10-1998. The directive of the P.M included the following. Develop the outline of a competitive, modern and dynamic power sector, which meets the requirements of the consumers in the cheapest and the most efficient manner. Ensure that the restructuring and reform of WAPDA’s Power Wing leads to such a vision.

ESTABLISHMENT OF NEPRA The strategic Plan included the creation of an Independent regulatory Authority to provide a level playing field to all the stake holders and to assure prospective investors that an independent agency would be objectively deciding on regulatory matters of power sector without extraneous influence. NEPRA was established by the Government of Pakistan in January 1995 through a Presidential Ordinance . NEPRA was formally notified through promulgation of the Regulation of generation, Transmission and Distribution of Electric Power, as Act No. XL of 1997 on 13 th December 1997.

To develop and pursue a Regulatory Framework, which facilitates working of utilities and other related concerns to ensure the provision of safe, reliable, efficient and affordable electric power to the electricity consumers of Pakistan; shall facilitate the transition from a protected monopoly service structure to a competitive environment where several power sector entities function in an efficiency oriented or market driven environment and shall maintain a balance between the interests of the consumers and service providers in unison with the broad economic and social policy objectives of the Government of Pakistan. Mission Statement

EXISTING ARRANGEMENT IPPs WAPDA HYDRO GENCO 1 GENCO 2 GENCO 3 Other Gencos Nuclear Other Dist. Companies e.g. KESC DISCOS 1 to 8 Large Consumers Bulk Power Consumers Other Consumers G.M. Finance (Power) WAPDA Transmission Central Dispatch NTDC Provision of Service Financial Flows POWER STRUCTURE TRANSITION

Single Buyer Plus Arrangement (up to 2009) IPPs WAPDA HYDRO Other Gencos Other Dist. Companies new demand DISCOS 1 to 8 Large Consumers BULK Power Consumers Other Consumers Network Operator System Operator NTDC Financial Flows Provision of Service Bilateral Contracts New BPCs New Gencos GENCO 3 GENCO 2 GENCO 1 Nuclear B ilateral Contracts With NEW BPC Contracts Information Do not require 3 years notice Other Gencos POWER STRUCTURE TRANSITION PROPOSED May cater for 8 Discos Contract Registrar CPPA

Phase 2 - Bilateral Contract model IPPs WAPDA HYDRO Other Gencos Other Dist. Companies DISCOS 1 to 8 Large Consumers Bulk Power Consumers Other Consumers CONTRACT REGISTRAR SETTLEMENT Network Operator System Operator NTDC FINANCIAL FLOWS PROVISION OF SERVICE BILATERAL CONTRACTS GENCO 3 GENCO 2 GENCO 1 Nuclear Power Structure Transition Proposed Cater for 8 Discos CPPA Contracts Information

Need for a Regulatory Regime Independence from extraneous influences and pressures. To develop regulatory comfort for investors. Safe-guarding interests of all stake holders. Introduction of international best practices To Facilitate privatization and competition. To assist Government in formulation of Power Policy. To help in development of an efficient Power Sector

The Authority is constituted of a Chairman, appointed by the Federal Government, and four members also appointed by the Federal Government on the recommendations of the Four Provincial Governments. The Chairman and the members are appointed for a tenure of four years and are eligible for a similar term. Constitution of the Authority

Organogram of NEPRA Licensing Wing Tariff & IT Wing Consumer Affairs, Coord & Legal Standards Wing Privatiza tion/Wing Administra tion & HR Registrar Chairman Member Standards Member Licensing Member Tariff Member Privatization

Powers and functions of NEPRA under the Act Grant licenses to Generation, Transmission and Distribution services. Determine tariff, rates, charges and other terms and conditions. Prescribe and enforce performance and investment standards. Prescribe fees and fines. Make efforts & act in a manner that a continuous, efficient and affordable supply of electric power services to the consumers can be ensured.

Act/Rules/Procedures (Framed by NEPRA) Regulation of Generation, Transmission and Distribution of Electric Power Act (XL of 1997). Enacted by Parliament in December 1997. Tariff Standards and Procedure Rules, 1998. Licensing, Application & Modification Procedure Regulations1999, Licensing (Distribution) Rules, 1999. Licensing (Generation) Rules, 2000. Fees and Fines Rules, 2002. Consumer Eligibility Criteria (Regulations), 2003. Resolution of Disputes between IPPs & other Licensees,2003 Performance Standards (Distribution) Rules 2005 Performance Standards (Transmission) Rules 2005 Interim Power Procurement (Procedure & Standards ) regulations 2005 Grid Code, Distribution code 2005 Consumer Service Manual 2007

Players in the Power Sector Regulator Government, Privatization Commission Consumers , Chambers of Commerce & Industry. IPPs Public Bodies, Representatives, Utility Companies Un-electrified Area residents

Formation of Rules, Regulations, Procedures Granting of Licenses Tariff approval-----MYT( KESC, FESCO), IPPs , GENCOs, Wind. Upfront tariff.----- For Thermal & Wind IPPs Standards ---- Monitoring of Performance Consumers’ Interests.– Complaints-Hearings Tribunals Exchange Programs. SAFIR, SARI, USAID, World Bank, USEA, PURC, NARUC, Ofgem, TERI/CERC, South Africa, China Present Status

South Asia ---Energy Market Transformation Independent Power Plants State owned Generation Transmission Distribution Companies Independent Power Plants State owned generation Transmission Distribution Companies Independent Power Plants Captive Power Plants State Owned Generation Transmission Distribution Companies Independent Power Plants Captive Power Plants Power Pools / Power Exchanges / OTC/PTC Open Access Customers Open Access Customers Vertically Integrated Utilities Generation Transmission Distribution Afghanistan Bhutan Sri Lanka Nepal Maldives Bangladesh India Pakistan Multiple players Multiple players Multiple players Multiple players Multiple players Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Vertically Integrated Utilities Generation Transmission Distribution Limited India

HYDEL THERMAL MIX Total 19450 MW Oil 6497 MW (34%) Hydel 6499 MW (34%) Nuclear 452 MW (2%) Coal 150 MW (1%) Gas 5815 MW (30%)

Originally WAPDA and KESC two virtually integrated companies now feeding about 15M and 2Million consumers respectively. Through the Strategic Plan, WAPDA Corporatized into Four generation, One transmission and Eight Distribution Companies with Residual WAPDA controlling Hydropower. Vertically Integrated KESC un bundled into KESC Generation, KESC Transmission and KESC Distribution with Separate Licensees but under the same management. REASONS High Losses DISCOs 25%( all combined- Ranging from 10% to 35%) KESC 40% In efficiencies Management Problems Inadequate Consumer Response/Service Quality A lot of subsidy to be born by the Government annually to run these entities Cross-Subsidies Corporatization/Privatization of Distribution Companies

WAPDA Corporatised into EIGHT Discos (Distribution Companies) One Disco (FESCO) offered for privatization Individual Tariffs for each Disco notified in 2007 after three years of delay With tariffs notified each Disco to be financially independent Discos can now plan their own development plans and sign loan agreements. Have the power to sign bi-lateral agreements with any GENCO for meeting its excess capacity KESC Privatized in 2005 (taken over by the new management) KESC Distribution separate licensed Has its own Consumer end tariff The total tariff including Generation plus Transmission and Distribution is a Multi Year Tariff for a control period of Seven Years. The salient features of the MYT are Control Period 7 years As per the mechanism KESC DISCO break even after three years with losses down from 40% to 25% Forth year ownwards KESC Disco supposed to earn profit Privatized KESC would invest around US$ 500M in KESC Distribution only Any un notified amount above Consumer end tariff will be paid by the Govt. as subsidy Restructuring of WAPDA and KESC

Unbundling and Regulation of Generation, Transmission & Distribution Generation Licensed Distribution Licensed Transmission Licensed

Bulk Power Consumer Generator 1 Generator 2 National Power Control Centre DISCO 1 DISCO 2 Transmission Charges Bilateral Contracts Distribution Charges Metering Metering NEPRA VISION ABOUT MARKET

Ex WAPDA GENCOS--- 4 Nos All Licensed WAPDA Hydel ----- 1 Comprehensive License IPPs Pursuant to 1994 P.P ---- 16 Nos all Licensed IPPs Pursuant to 2002 P.P----- 18 Nos all Licensed (COD not yet) KESC generation ------ 01Licensed SPPs ---------- 26 Nos all Licensed Distributed generation---------- 7 Nos all Licensed Wind Energy -------------------- 6 Nos Licensed Nuclear 2 Nos Licensed Generation Business in Pakistan

Year Wise Progress (LICENCING) 07 07 SPPs Dis. 11 ---- ---- ---- ---- ---- 01 10 2001 17 ---- ---- ---- 04 01 07 05 2002 14 ---- 12 01 ---- ---- 01 ---- 2003 18 01 04 ---- ---- ---- ---- 13 2004 09 ---- 03 01 01 ---- ----- 04 2005 17 10 2006 10 09 1 2007 Year SPPs Gen./IGC DISCOs/KESC NTDC GENCOs & KESC NUCLEAR IPPs/ Wind WAPDA HYDEL TOTAL 2008 02 02 Total 33 09 01 05 02 40 01 98

NTDC------- Licensed KESC Transmission----- License in Process Transmission Business in Pakistan

DISCOs-------- 8 Nos all Licensed with Individual tariffs. PPP Distribution Margin Average Sale Rate Consumer end tariff KESC----------KESC Distribution License PPP--- KESC own Generation, NTDC, IPPs Distribution Margin Average Sale Rate Consumer End Tariff SPPs/IGCs--------33 Nos Out of this only 9 Nos qualify for the grant of a distribution license. All Licences granted except 2 No. for Distribution Consumer End Tariffs notified Distribution Business in Pakistan

BPC operative at the time of Discos Licences------ All Such cases being identified and notices being issued. 1 st hearing of its kind held in May 2007 for grant of distribution License to Bahria Town Housing Colony (an Inset H/S within the geographical boundaries of IESCO). Separate distribution License Prepared Will have a separate tariff Will be required to meet all Standards/ Codes Policy on the Eligibility Criteria for such INSET entities being developed. This will include the Principle of Eligibility for such INSET applications. Distribution Business in Pakistan

Year Wise Progress (TARIFF) Year Determination (WAPDA/KESC/GENCOS/NTDC/DISCO s) Others Total 1998 04 ---- 07 1999 04 ---- 04 2000 02 01 03 2001 13 ---- 13 2002 06 01 07 2003 09 01 08 2004 29 03 33 2005 47 04 24 2006 25 01 05 2007 31 15 46 Total 170 26 196

UP- Front tariff for various technologies Sr. No. Technology Efficiency Levellised Tariff(Cents/Kwh) 1 Reciprocating Engine Technology 45% 11.9713 Cents/Kwh 2 Up front tariff for Wind Farms 9.5 Cents/Kwh with assumptions 3 Up front tariff for Coal based plants 7.8 Cents/Kwh without assumptions

Unrestricted self Generation & Bilateral Contracts. Affordable tariff for all categories. Life line consumers’interests Redressal of Complaints: Utility services obligation Provincial offices of inspection established by the Provinces Consumer Affair Division at NEPRA attended/rectified over 1800 Nos complaints since inception. Representation through Consumer/human rights Org./Public Hearings Education/Information through media/website. Safeguarding interests of Consumers

Complaints Handling All the four Provinces have since established Provincial Offices of Inspection and are functioning pursuant to Sec 38 of the NEPRA Act Year Complaints Recieved Complaints Addressed through Provincial Offices of Inspection/DISCOs Complaints redressed through NEPRA Consumer Affairs Division under Complaint Redressal mechanism/ POI 2001 76 76 Complaints Redressed through DISCOs 2002 187 151 36 2003 237 172 65- Attock Cement Vs KESC 2004 354 238 116- Iftekhar Ahmed Vs IESCO, PWD H/s Vs IESCO, D.s Textile Mills Vs LESCO c 2005 1098 851 217- PACE Lahore, Civilian Coop H/s 2006 2007 548 357 355 241 193- Tayyab textile mills Vs FESCO, HDIP Vs IESCO, Saima trade towers Vs KESC, KESC Vs NTDC 95-

South Asia Energy Supply Overview . . . MALDIVES SRI LANKA INDIA NEPAL BHUTAN PAKISTAN AFGHANISTAN Central Asia Hydro & NG Hydro Resources Wind Resources Natural Gas LNG imports Coal Petroleum Reserve… BANGLADESH Wind Resources Transit Business Coal Coal Hydro Resources LEGEND = Existing trades (Bhutan & Nepal to India) = Potential trades = E.S. opportunity

Future Potential on indigenous resources No Fuel/tech Expected Potential 1 Hydel 41000MW 2 Coal 20000MW 3 Renewable 10000MW 4 Nuclear 8800MW 5 Mini/Micro hydel 700MW

New Capacity August 2009 150 MW Eastern Power Co. 10 March 2009 225 MW Atlas Power Project 9 No New Capacity Capacity Expected COD 1 DHA Co-Gen 94 MW Commissioned 2 Star Power 133.515MW January 2011 3 Orient Power 225 MW December 2008 4 Saif Power 225MW February 2010 5 Sapphire Electric 235MW July 2009 6 Foundation Power 202MW May 2008 7 Attock Gen Ltd 165.285 Oct. 2008 8 Halmore Power 225MW October 2009

New Capacity December 2010 225 MW PIE-Am Power Project 20 December 2010 200 MW Liberty Power Tech 19 No New Capacity Capacity Expected COD 11 Fauji Mari Power Project 202 MW September 2009 12 Nishat Power Ltd. 200 MW December 2009 13 Engro Power Project 227 MW December 2009 14 Gulf Power Project 179 MW March 2010 15 HUBCO Norowal 225 MW March 2010 16 Nishat Chunnian Power Ltd. 200 MW January 2010 17 KAPCO (Expansion at Kot Addu) 400 MW December 2010 18 Green Power Project 205 MW December 2010

New Capacity No New Capacity Capacity Expected COD 21 Western Electric Power Generation Project 150 MW December 2010 22 Bestway Power Project 200 MW March 2011 23 Uch-II ICB Project 450 MW January 2011 24 Gulistan Energy Power Project 200 MW January 2011 25 Leading Power Project 200 MW December 2011 26 New Bong Escape Hydel Project 84 MW December 2011 27 Rajdhani Hydro Power Project 132 MW March 2012

Projected Shortages Electricity Growth rate assumed to be 9% Year Installed Capacity Peak demand Surplus/deficit 2005 19226/16000 14000 3000 2006 19226/16000 15200 800 2007 19226/16000 16500 (500) 2008 19500/16400 18000 (1600) 2009 19500+ 19500 (2100) 2030 60000+

Electricity Requirements (Growth) Projected in South Asia (MW) Country Present Generation Present Peak Growth in Electricity Sector % Demand 2010 Demand 2030 Afghanistan 454 254 --- local 13 1000+ (various Sources) ----- Bangladesh 5000 4300 8 7000(exp) 20000-Elect for all by 2020 Bhutan 426 200 (Local) 1600 (export) 13 200-1600 (exp) Elect for all by 2020– 7500-20000 ava for export India 123668 130000 7-8 212000 962000 Maldives 106 13 400 ----- Nepal 630 572 6 1000 MW Between 7500-20000 ava for export Pakistan 19550 16500 8 27000 162000 Sri lanka 2231 1748 8 2600 10000- exptd

Proper Long term Load Forecasts and Generation Planning Study to assess year-wise weather-wise shortfalls by NTDC/KESC/MOW&P Expediting Hydropower Development Expediting Coal based Power plants Expediting Coal-mining separately Assessment of reasons for delay in Gen. Development Comprehensive subsidy policy. Close coordination amongst key stakeholder Review of Policy Decisions to resolve the issues Comprehensive Energy Conservation measures Network Augmentation Suggestions

Potential of Indigenous Resources in South Asia (MW) Country Hydro (MW)/used potential Oil---Million barrels Mbls/ mtoe Gas (tcf)/(mtoe) Coal (million tons)-Total-Proved-used Renewable (MW) Afghanistan 23000 ----- 120 bm3 125 ----- Bangladesh 775/ 230-30% 5.69/0.78 10.6/275.6 2715-724-0 Tidal waves Bhutan 50000/420-1.4% ------- ------ ------- ----- India 201,000/29500-15.2% 5700/777.5 26.9/700.5 245690-91631-NA 150000 Maldives ------ ------ ------- ------ Wind Potential Nepal 42,915/527-1.2% ------- ----- 5.0-5.0-0.1 ----- Pakistan 40,000/6500-16% 288/39.3 26.8/697.6 185000-3300-200 30000-50000 Sri lanka 2000/1250-62.5% -------- -------- ------ 30000 Total Potential 337,000 (11% tapped) 1 tcf of gas can run 1000MW for 20 yrs 1.0b tons of coal reservoir can run a 7000 MW plant for 20yrs

Nepr As Role By Rifai

More Related Content

What's hot (20)

Viewers also liked (7)

Similar to Nepr As Role By Rifai (20)

More from IEEEP Karachi (20)

Recently uploaded (20)

Nepr As Role By Rifai